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NOTES TO THE FINANCIAL STATEMENTS
Year ended 31 December 2013
2.
Summary of significant accounting policies (cont’d)
2.6
Property, plant and equipment (cont’d)
Depreciation of an asset begins when it is available for use and is computed on a straight-line basis over the
estimated useful life of the asset as follows:
Leasehold land
–
30 years
School furnishings
–
Lower of 6 years and the remaining lease term
School renovations
–
Lower of 6 years and the remaining lease term
School equipment
–
Lower of 6 years or the remaining lease term
Computers
–
6 years
Motor vehicles
–
3 to 10 years (to a residual value) *
Library books and media
–
6 years
* Motor vehicles are depreciated to a residual value of the vehicles’ minimum Preferential Additional Registration Fee (PARF) bene t, a
rebate granted when vehicles are deregistered within 10 years from date of manufacture.
Construction-in-progress is recorded when an expenditure is incurred and capitalised in relation to the building of
a new school campus, and would be reclassified to building when the construction of the new school campus is
completed. Construction-in-progress is not depreciated as the related assets are not yet available for use.
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in
circumstances indicate that the carrying value may not be recoverable.
The residual value, useful life and depreciation method are reviewed at each financial year end and adjusted
prospectively, if appropriate.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are
expected from its use or disposal. Any gain or loss arising on derecognition of the asset is included in the profit or
loss in the year the asset is derecognised.
2.7
Intangible assets
Intangible assets acquired separately are measured initially at cost. Following initial recognition, intangible assets
are carried at cost less any accumulated amortisation and any accumulated impairment losses. Internally generated
intangible assets, excluding capitalised development costs, are not capitalised and expenditure is reflected in profit
or loss in the year in which the expenditure is incurred.
Intangible assets with finite lives are amortised on a straight-line basis over the estimated economic useful lives and
assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation
period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each
financial year end. Changes in the expected useful life or the expected pattern of consumption of future economic
benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and
are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite useful
lives is recognised in the profit or loss through the ‘amortisation of intangible assets’ line item.
Intangible assets with indefinite useful lives or not yet available for use are tested for impairment annually, or more
frequently if the events and circumstances indicate that the carrying value may be impaired either individually or
at the cash-generating unit level. Such intangible assets are not amortised. The useful life of an intangible asset
with an indefinite useful life is reviewed annually to determine whether the useful life assessment continues to be
supportable. If such assessment is not supportable, the change in useful life from indefinite to finite is made on a
prospective basis.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net
disposal proceeds and the carrying amount of the asset and are recognised in the profit or loss when the asset is
derecognised.
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Overseas Education Limited AR 2013
INVESTING IN EDUCATION